COBS 2.1 Acting honestly, fairly and professionally

1. (1)

   A firm must act honestly, fairly and professionally in accordance with the best interests of its client (the client's best interests rule).

2. (2)

   This rule applies:

   1. (a)

      in relation to designated investment business carried on for a retail client;

   2. (b)

      in relation to MiFID, equivalent third country or optional exemption business, for any client; and

   3. (c)

      in relation to insurance distribution, for any client.

3. (3)

   For a management company, this rule applies in relation to any UCITS scheme the firm manages.

In relation to its eligible counterparty business, a firm must act honestly, fairly and professionally, taking into account the nature of the eligible counterparty and its business.

[Note: article 30(1) of MiFID]

A firm must not, in any communication relating to designated investment business seek to:

1. (1)

   exclude or restrict; or

2. (2)

   rely on any exclusion or restriction of;

any duty or liability it may have to a client under the regulatory system.

A full-scope UK AIFM must, for all AIFs it manages:

1. (1)

   act honestly, fairly and with due skill care and diligence in conducting their activities;

2. (2)

   act in the best interests of the AIF it manages or the investors of the AIF it manages and the integrity of the market;

3. (3)

   treat all investors fairly; and

4. (4)

   not allow any investor in an AIF to obtain preferential treatment, unless such preferential treatment is disclosed in the relevant AIF's instrument constituting the fund.